When it comes to the different types of Hong Kong financial licenses (No. 1 to No. 9), each license represents a specific financial activity and provides licensed institutions with the opportunity to carry out diversified services in the Hong Kong financial market. These licenses not only mark the institution's compliance status, but also demonstrate Hong Kong's strong appeal as an international financial center. Through these licenses, institutions can actively participate in different fields such as securities trading, futures contract trading, and foreign exchange trading, and provide investors and customers with diversified financial solutions such as professional investment consulting, asset management, and financing services.
License No. 1 - Dealing in securities: Licensed institutions can engage in securities trading activities, that is, buying and selling stocks, bonds and other securities products.
License No. 2 - Dealing in futures contracts: Licensed institutions can engage in futures contract trading activities, involving various commodity futures, financial futures, etc.
License No. 3 - Leveraged foreign exchange trading: Licensed institutions can provide leveraged foreign exchange trading, allowing customers to control larger trading positions with smaller funds.
License No. 4 - Advising on securities: Licensed institutions can provide consulting advice on securities investment and help customers make investment decisions.
License No. 5 - Advising on futures contracts: Licensed institutions can provide advice on futures contract investments and assist customers in futures investments.
License No. 6 - Advising on corporate finance for companies applying for securities licenses (Advising on corporate finance): Licensed institutions can provide consulting advice on corporate financing for companies applying for securities licenses and assist companies in financing activities.
License No. 7 - Providing automated trading services: Licensed institutions can provide automated trading services, including the use of computer algorithms for trading.
License No. 8 - Providing securities margin financing: Licensed institutions can provide securities margin financing to help customers finance securities investments.
License No. 9 - Providing asset management: Licensed institutions can provide asset management services and manage customers' investment portfolios to achieve their investment goals.
The application meets the main requirements
Legal structure: The applicant must be a company incorporated in Hong Kong or an overseas company registered with the Hong Kong Companies Registry.
Competencies: Applicants need to demonstrate a mature business structure, effective monitoring systems and professional personnel to manage and control business risks.
Responsible Officers: Each regulated activity must appoint at least two Responsible Officers who directly supervise the relevant activities.
Licensed Representatives: Persons engaged in regulated activities are required to become licensed representatives, who are required to meet fewer qualifications and experience requirements.
Shareholder qualifications: All major shareholders holding more than 10% of the shares must meet the SFCâs fit and proper criteria.
Financial Resources: Applicant institutions are required to maintain adequate financial resources, including minimum paid-up capital requirements.
Executive requirements: The applicant organization needs at least two executives to be responsible for company management and appoint one as the executive director.
Regulatory assessment: The Hong Kong Securities and Futures Commission will assess the applicantâs solvency, financial condition, qualifications, business experience, compliance capabilities, reputation and financial soundness.
Regulatory requirements: Licensed companies must meet paid-in share capital and liquid capital requirements, client funds must be stored in isolation, financial solvency and internal compliance records must be retained, financial records must be retained in accordance with international accounting standards, and regular reporting disclosures must be made.
Declaration and auditing: Licensed institutions are required to regularly submit financial resource declaration forms and submit audited accounts and related documents to the Securities and Futures Commission.
Ongoing supervision: Once a financial license is obtained, the licensed institution needs to continue to comply with regulatory requirements and undergo regular regulatory review.
Applying for and obtaining these financial licenses is not an easy task. In different types of financial activities, institutions need to meet strict legal, financial, personnel and other requirements to ensure that they have robust business capabilities and compliance levels. As Hong Kongâs financial markets continue to develop, regulatory requirements continue to evolve.
